EU bans Iranian oil despite military threats

EU foreign ministers have set the clock ticking on an Iran oil embargo in six months' time despite fresh threats of naval retaliation.

Ministers in Brussels on Monday (23 January) agreed the Union will from 1 July no longer buy Iranian crude oil - worth about 20 percent of its exports - in order to stop an alleged nuclear weapons programme. It also blacklisted the Iranian central bank and banned trade in gold and diamonds.

The time-lag is designed to help Greece, Italy and Spain sign new oil contracts with Saudi Arabia and the United Arab Emirates. In other softeners, the oil ban could be scrapped in a review in May and Iran's central bank will be allowed to handle EU trade in some areas, such as food and textiles.

Two Iranian MPs the same day repeated the country's threat to block the Strait of Hormuz, a conduit for Saudi oil, in return - a move that could trigger a serious energy crisis. "[It] would definitely be closed if the sale of Iranian oil is violated in any way," Mohammad Ismail Kowsari told the Associated Press.

Iran has three diesel-powered attack submarines, a fleet of mine-laying mini-submarines and batteries of anti-ship missiles in the area.

Nothing happened in the Arabian Gulf immediately after the EU announcement, however. Oil markets also stayed calm, with prices going up by just $1-or-so per barrel.

The US and select EU member states have overwhelming force in the Bahrain-based Combined Maritime Forces fleet. Apart from two US aircraft carriers, the UK also has two frigates, a surveillance vessel, four anti-mine ships, three support ships and a nuclear-powered attack submarine.

A French anti-submarine frigate, one of the US carriers and a British vessel sailed through the strait on Monday.

A French defence ministry spokesman told EUobserver: "There is nothing exceptional about the situation down there."

Speaking to press in Brussels, British foreign minister William Hague noted: "Any attempt to close the Strait of Hormuz would be illegal and I also believe it would be unsuccessful."

An Israeli analyst was more blunt.

"They won't go that far because the US has enough force in the Gulf to dismantle the Iranian regime if it wants to ... The Iranians know that the US would not absorb a big increase in oil prices in an election year and that there would be a devastating response," Alon Ben-David, a defence expert for Israel's Channel 10 TV station told this website.

He noted that Iran will still be able to sell oil, but that Chinese companies will use the embargo to haggle down prices.

Amid world reactions to the EU move, Russia criticised the bloc for bypassing the UN.

Foreign minister Sergei Lavrov's remarks were mild compared to his statement last week, however. On Wednesday, he accused the US and the EU of trying to foment a revolution in Iran and to start a war with its main regional ally, Syria (also hit by new EU sanctions on Monday).

For his part, French foreign minister Alain Juppe told reporters in Brussels the sanctions are an alternative to war.

"They mean paralysing economic activity in the country and cutting off revenues from its natural resources. I know there are sceptics who say they are good for nothing [in terms of stopping uranium enrichment]. But they are better than waging war," he said.

The leaders of France, Germany and the UK followed up the EU decision with a joint communique.

"We have no quarrel with the Iranian people. But ... we will not accept Iran acquiring a nuclear weapon," they said.

"With friends like that, who needs enemies?" European Council Donald Tusk asked on Wednesday, as EU leaders were trying to come up with a reply to the US president's questioning of the transatlantic relationship.

Opinion

While few people in Europe have heard of the 'Achmea' ruling, the case will have far-reaching consequences. Member states must understand the implications of the case quickly - especially those considering ratifying the EU-Canada trade agreement.